On 10 june, 2017, Hood Ltd had an issue of preference shares that traded at $75 a share If the face

 
   

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On 10 june, 2017, Hood Ltd had an issue of preference shares that traded at $75 a share If the face value of the shares was $100 per share and the dividend is$600

REQUIRED:

i) Calculate Hood Ltd’s cost of preference shares

ii) If the cost of debt is the same as in i) above, would you recommend that the company use debt or preference shares to raise additional capital Give reasons